Here we are trying to explain the Concept of Stretch, Leverage and Fit in Strategic Management. We also giving some examples and related information to get more idea about this topic. Hamel and Prahalad added this concept to the strategic intent.
Stretch, Leverage and Fit in Strategic Management
Subsequent to the idea of strategic intent, Hamel and Prahalad added the concept of ‘stretch’ and ‘leverage’.
Stretch – Definition
“Stretch is a misfit between resources and aspirations”
The strategic fit is central to the strategy school of positioning where techniques like SWOT analysis can be used to analyze and assess the organizational capabilities and environmental opportunities.
Leverage – Definition
“Leverage can be defined as the process or act of concentrating, accumulating, complimenting, conserving, and recovering resources in such a manner that meagre (less or insufficient in amount) resource base is stretched to meet the aspirations that an organization dares to have.”
“This is exactly opposite to the idea of fit and deals with positioning the firm by matching its organizational resources to its environment.”
Concept of Stretch, Leverage and Fit
Under fit, the strategic intent would seen to be more realistic, under stretch and leverage it could be idealistic.
e.g. Tata Steel’s Strategic Intent
(Vision, Mission, Objectives etc.)